Several prominent American retailers have reportedly begun removing Xbox consoles from their store shelves, according to recent industry reports. This development suggests growing challenges for Microsoft's gaming hardware division as major retail partners appear to be scaling back their Xbox inventory.

The trend began in late September 2025 when Costco completely removed Xbox sections from its website and implemented significant price reductions on remaining Microsoft consoles in physical locations. Consumer reports indicated this inventory clearance was not limited to the United States, with similar actions observed in Costco stores across the United Kingdom, New Zealand, and other international markets.

The inventory reduction pattern now appears to be expanding to other major retail chains. According to testimonies from Reddit users identifying themselves as Target employees, the retailer began removing Xbox sections from select stores during the week of October 6. Meanwhile, another Reddit user claiming to work at Walmart stated their location planned to eliminate its entire Xbox section following ongoing store renovations. These reports surfaced shortly after Sam's Club initiated its own Xbox console clearance and less than a month following Costco's similar actions.

Neither Walmart nor Target have officially confirmed nationwide policies regarding Xbox product removal. However, the mounting evidence suggests a broader trend, particularly after Costco characterized its Xbox clearance as a definitive "business decision" with no immediate plans for reversal.

Despite these retail developments, Microsoft continues to assert its commitment to Xbox hardware. In an October 5 statement provided to media outlets, a company spokesperson confirmed the technology giant remains "actively investing" in first-party gaming hardware as of late 2025. The statement strongly implies that another generation of Xbox consoles remains in development, with the primary question being timing rather than existence.

What remains uncertain amid these retail shifts is the specific form Microsoft's next-generation console lineup will take. With hardware sales declining amid brand challenges and tariff-induced price increases—including an October 3 price adjustment that raised the 2TB Xbox Series X to $800—the company may need to align future consoles more closely with PC architecture. A unified software development kit could streamline multi-platform development, allowing studios to release Xbox console games without substantial additional investment, essentially treating them as PC versions optimized for specific hardware configurations. Industry analysts currently project the tenth console generation to launch around late 2027.